Karayilmaz v Karayilmaz - [2016] VSC 463

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

S CI 2016 01101

IN THE MATTER of the application by YASEMIN KARAYILMAZ under section 77 of the Transfer of Land Act 1958 (Vic) and section 69 of the Trustee Act 1958 (Vic)

BETWEEN:

YASEMIN KARAYILMAZ	Plaintiff
v
UYGUR KARAYILMAZ	Defendant

JUDGE:	LANSDOWNE AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	20 June 2016
DATE OF JUDGMENT:	5 August 2016
CASE MAY BE CITED AS:	Karayilmaz v Karayilmaz
MEDIUM NEUTRAL CITATION:	[2016] VSC 463

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PAYMENT OUT FROM FUNDS IN COURT – Competing claims by former husband and wife following payment in by mortgagee of balance proceeds of sale of former matrimonial home – Plaintiff wife the former registered proprietor – Family law orders providing for payment of $30,000 to wife then transfer of home or balance proceeds after sale to husband – Whether orders created an equitable interest for husband or a mere equity – Held that each party acquired an equitable interest – Priority established by family law orders – Whether there is a factual basis to postpone wife’s priority under the orders to the husband’s interest – No factual basis established for such postponement – Whether such postponement is possible as a matter of law given the constitutional issues that would arise if the priority established by the family law orders was sought to be disturbed by application in this Court briefly discussed – Family Law Act 1975 (Cth) ss 79, 79A.

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APPEARANCES:	Counsel	Solicitors
For the plaintiff	Mr K Rotarou, solicitor	Melbourne Lawyers & Mediators
The defendant appeared in person

TABLE OF CONTENTS

Introduction......................................................................................................................................... 1

Facts....................................................................................................................................................... 3

Applicable legal principles and issues........................................................................................... 5

Discussion of matters raised by the defendant.......................................................................... 12

Damage to property.................................................................................................................... 12
Failure to pay rent to the defendant......................................................................................... 14
Effect on credit rating................................................................................................................. 17

Conclusion......................................................................................................................................... 23

Costs.................................................................................................................................................... 23

Orders................................................................................................................................................. 25

HER HONOUR:

Introduction

This is an application for payment out of funds which were deposited into Court by a mortgagee pursuant to s 77 of the Transfer of Land Act 1958 (Vic) (‘Transfer of Land Act’) and s 69 of the Trustee Act 1958 (Vic). The mortgagee deposited the sum of $30,671.39 into Court on 9 December 2015 after exercising its power to sell the subject property, 25 Village Avenue, Taylors Lakes (‘the property’) for the sum of $319,000 on 29 August 2015.

The plaintiff is the former registered proprietor of the property. The defendant is her former husband, who lodged a caveat claiming an equitable interest in the property pursuant to orders made by the Federal Circuit Court in a family law proceeding between the parties. Those orders were made on 20 February 2015.

There is another interested party being the purchasers from the plaintiff of the property under an earlier contract of sale which did not proceed. Those purchasers also lodged a caveat in respect of the interest pursuant to that contract. They have subsequently provided their consent to payment out to the plaintiff…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] VSC 463
Decision Date: 5 August 2016

CaseChat Overview and Summary

The appeal before the court involved the parties Karayilmaz and Karayilmaz, who were dealing with competing claims related to the distribution of funds from the sale of their former matrimonial home. The wife, the former registered proprietor, had received an order under the Family Law Act 1975 (Cth) that required the payment of $30,000 to her and the subsequent transfer of the home or the balance of the proceeds from the sale to her husband. The dispute centred on whether the wife had acquired an equitable interest in the property, and whether the husband's interest could be postponed in favour of the wife's interest.

The court had to decide whether the family law orders created an equitable interest for the husband or merely a mere equity. It was determined that both parties acquired an equitable interest in the property. The priority of these interests was established by the family law orders. The court also had to determine if there was a factual basis for postponing the wife's priority under the orders to the husband's interest, which was found not to be substantiated. The court briefly discussed the constitutional issues that could arise if the priority established by the family law orders was to be disturbed by an application in this Court.

The court held that there was no factual basis to postpone the wife's priority under the family law orders to the husband's interest. The court also briefly addressed the constitutional issues that could arise if the priority established by the family law orders was to be disturbed by an application in this Court. The final orders of the court reflected the outcome of the appeal, with the wife retaining priority under the family law orders.

Orders